Friday, November 30, 2007

It is the end of the month and you know what that means for data addicts like me . . . the local real estate boards will release their statistics package outlining inventory, sales, and prices for our local real estate market early next week - probably Tuesday.

So let us speculate, unscientifically of course, on what the data will be.

Last month saw 6 months of inventory in the Fraser Valley Real Estate Board area with no significant price changes. Prices have not risen in the Fraser Valley since the July / August period and seem to be stuck at that level for the time being. We need more inventory and/or lower sales to see further price declines. Will we see that this month?

Last month also saw 4 months of inventory in the Greater Vancouver Real Estate Board area with modest price appreciation. Price growth is still robust in the GVREB area, although some areas are showing weakness, especially in the outlying areas. Inventory and sales are still bullish in the Greater Vancouver area and we need to see inventory grow and sales shrink before any price correction can materialize. When will we see this happen?

Tuesday, November 27, 2007

Here is a fascinating piece about one of the bullwhip effect on supply chain management that currently effects the real estate market.The basic concept behind supply chain management is simple: customers order products from you; you keep track of what you're selling, and you order enough raw materials from your suppliers to meet your customers' demand. So why is it that, in a recent article, the Economist claimed that, "Managing a supply chain is becoming a bit like rocket science?"

The problem turns out to be one of coordination. Suppliers, manufacturers, sales people, and customers have their own, often incomplete, understanding of what real demand is. Each group has control over only a part of the supply chain, but each group can influence the entire chain by ordering too much or too little. Further, each group is influenced by decisions that others are making.

This lack of coordination coupled with the ability to influence while being influenced by others leads to what Stanford's Hau Lee refers to as the Bullwhip Effect. Decisions made by groups along the supply actually worsen shortages and overstocks.

The bullwhip effect is illustrated by a story Prof. Lee tells about how Volvo found itself with extra inventories of green cars. To get them off the dealers' lots, Volvo's sales department offered special deals, so demand for green cars increased. Production, unaware of the promotion, saw the increase in sales and ramped up production of green cars.

Cisco faced a similar problem last year that resulted in a $2.2 billion inventory write-down. Only a few months before the write-down, Cisco wasn't able to get its products to customers quickly enough. Quoting a supplier to Cisco interviewed in CIO Magazine, "People see a shortage and intuitively they forecast higher. Salespeople don't want to be caught without supply, so they make sure they have supply by forecasting more sales than they expect. Procurement needs 100 of a part, but they know if they ask for 100, they'll get 80. So they ask for 120 to get 100."

Delays Wreak Havoc

But coordination isn't just about communication. Even in supply chains where communication is perfect, manufacturing and procurement delays can wreak havoc. That's because while customers are asking for increased orders, backlogs are building, and it is oh-so-easy to confuse backlogged orders with increases in demand.

Thousands have felt the frustration of supply chain management in a simulation developed at MIT's Sloan School of Management called the beer game. The simulation is run as a board game in teams playing the roles of retailers, wholesalers, distributors, and brewers of beer. As the backlog for orders increase, players order too much inventory, forcing their teammates into severe backlogs further down the supply chain. The game can be emotionally intense. John Sterman, Director of MIT's System Dynamics Group writes, "During the game emotions run high. Many players report feelings of frustration and helplessness. Many blame their teammates for their problems; occasionally heated arguments break out."

The Near Beer Game Simulation

You can try a version of the beer game called the Near Beer Game. It's called the Near Beer Game because, although it's not identical to the original beer game, it teaches many of the same lessons. It also teaches one extra lesson not in the original game: even with perfect information, even when there are no breakdowns in communication, you'll still feel the bullwhip effect due to procurement and manufacturing delays.

Here's how the Near Beer Game works: at the beginning of the simulation your supply chain is in perfect equilibrium. Customers are ordering ten cases of beer each week, you have ten cases in inventory, ten cases are brewing, and ten cases worth of raw materials are arriving from your vendors. In week two, demand increases to fifteen cases per week and remains at fifteen cases for the remainder of the simulation. The game ends when you manage to get your supply chain back in equilibrium for fifteen cases of beer.Sounds easy right? Try it out and see how many weeks it takes you. See if you can bring the supply chain back into equilibrium without the bullwhip oscillations of stock-outs followed by over-supply.

How to Reduce the Bullwhip EffectOne way to reduce the bullwhip effect is through better information, either in the form of improved communication along the supply chain or (presumably) better forecasts. Because managers realize that end-user demand is more predictable than the demand experienced by factories, they attempt to ignore signals being sent through the supply chain and instead focus on the end-user demand. This approach ignores day-to-day fluctuations in favor of running level.

Another solution is to reduce or eliminate the delays along the supply chain. In both real supply chains and simulations of supply chains, cutting order-to-delivery time by half can cut supply chain fluctuations by 80%. In addition to savings from reduced inventory carry costs, operating costs also decline because less capacity is needed to handle extreme demand fluctuations.In addition to cycle time reductions throughout the supply chain, Hau Lee, V. Padmanabhan, and Seungjin Whang recommend the following actions to reduce the supply chain management bullwhip effect:

Monday, November 26, 2007

Vancouver's population growth, despite having an indestructible economy and real estate market (according to some), has been undergoing a rather mediocre period of population growth for the past few years since 1998.

Vancouver's population growth was fairly robust until 1998 when growth plummeted and has never fully recovered to the above 2% rate witnessed for much of the city's recent history.

In light of accurate statistics to the contrary, why are so many locals convinced that our population growth is high? Could it be because so many new homes are being built? Why are the homes being built if population growth is so low?

Just how high could our unemployment rate get if there were massive construction industry layoffs? Quite obviously, very high, as in double digits high. Construction / Real Estate employment as a percentage of Vancouver labour force was 7% in 2001 and it now stands at 11%. If we just lost the increase in percentage the local unemployment rate would increase from around 4.5% to 8.5%.

How prepared are individuals for the prospect of increasing unemployment and job loss? Not very prepared. BC has a negative savings rate, which means the residents of BC spend more than they earn and have done so for many years now and do not even consider sustained job loss as a remote possibility as we have not had double digit unemployment rates for quite some time.

I don't really like being negative on the prospects of our region's economic future but I see very few bright spots and many risks for the future. The construction / real estate business is in a bubble, the manufacturing, film and tourism businesses are being negatively impacted by the currency, the forestry sector is in for a long downturn and now mining companies are walking away from projects for cost reasons.

It is my hope that people would use our current boom time to cushion themselves for the financial impacts that will be coming. Save, don't spend. Plan, don't consume. Pay off debt and build a cushion. Good luck.

Thursday, November 22, 2007

Well the October CMHC data for the Vancouver area came out today and here are the highlights:

Units under construction hit another record high at 23,950.

Starts were high at 1907. Completions were low at 1067.

Completed and unabsorbed units hit a new high at 1194. This is significant as it directly adds to the overall supply mix and I would term newly completed units as the "smart money" supply. Developers will cut prices quickly rather than sit on inventory. This is happening in Langley/Surrey right now. I see completed new units that have sat for 6 months having the price dropped gradually every month. The longer they sit unsold, the faster the price drops.

New home supply is expanding rapidly with even more units under construction now and prices have peaked in the Valley on new homes. This is very similar to US bubble markets where new homes are the leading indicator to what happens to existing homes.

Clearly at this point new supply completing now and scheduled to complete in the next 12 months is oversupply as evidenced by the ratio of new people to completions. Population growth is low but supply and the supply pipeline is hitting record highs. Add all of the speculator held inventory and we have a recipe for a major crash in our local market - it's all a question of when.

Monday, November 19, 2007

Well another loverly day in the blissful paradise that is Vancouver. Warm, balmy tempuratures in the low single digits, liquid sunshine of different varieties and over 8 hours of wonderfully cloud-filtered daylight. The weather must be one of the reasons for the real estate prices being higher here than anywhere else in North America. Really, California or Florida, give me a break . . . all they have is sun, sun, sun and hot, hot, hot. Who wants that!?!?! (um - don't answer that - me - thats who!)

Let's look at the Price / Rent ratio in our splendid and worthwhile village, er, I mean Metropolis of Vancouver. The average price / rent ratio over the data period has been 19.9 and currently sits at an all time high of over 27 as of June 2007.

Now let's look at Price / Rent ratio in other loverly places where sadly for them it doesn't rain as much. How would you get mould to grow if it doesn't rain? How would building envelope specialists be employed in these sunny climes? Notice anything about most of the more pricey real estate markets in the US? (hint - the earth orbits it and clouds block our view of it in Vancouver 300 days a year)

Vancouver clearly has nothing to worry about with its cost of living because quite obviously this is such a desireable place to live and nothing like Honolulu or San Diego or Miami. Smart people (or amazingly rich and stupid people) will pay anything to experience the bone-chilling warmth of Vancouver in November (and December and January and February) with short and wet days and dreary and soaking nights.

Price / Rent ratio be damned. What is the point of all these silly numbers anyway? Afterall how can you measure the cost of our amazing climate and mouldy buildings? Priceless I say.

Sunday, November 18, 2007

M- posting here. I last posted here several months ago. You may or may not remember me...

Here's an interesting Youtube video my wife just found. She was looking for information on Edmonton's real estate downturn, and found this Ozzie Jurock interview from about a month ago. He was asked about Edmonton's downturn, and the anchor questioned whether Vancouver could experience a similar downturn.

Ozzie posts some interesting numbers for Vancouver-- damned if I know where he got them from, but here they are:

What happened? Where did he get these numbers? Are these averages? Medians? Vancouver City? GVRD? REBGV?

Assuming these numbers were collected in the same manner, something shocking happened for higher-priced properties between the end of August and the end of September. It looks like the condo market continued to chug along, but the higher-end market stalled.

I'll try to embed the video here. This is my first time trying this, so it may not work right...

Thursday, November 15, 2007

17% of mortgage holders in Canada took out equity from their homes or increased the amount of the mortgage principal within the past twelve months.

The average amount of equity take-out is estimated at $35,400.

Various findings from the survey can be combined to generate an estimate of the total amount of equity take-out by Canadian home owners:• At present there are about 8.8 million owner-occupied dwellings in Canada.• Next, we need an estimate of how many home owners have mortgages. According to

Statistics Canada’s most recent survey of household spending (from 2005), 53% of Canadian home owners have mortgages. Interestingly, this is a reduction from the 55% share found in the 2001 Census – while there has been very large growth in the number of home owners in recent years, which has increased demand for mortgages, it has also happened that a large number of longer-term home owners have become mortgage-free.

It is possible that the share of owners with mortgages has increased slightly since the 2005 survey, because there has been a very large volume of completions of new homes during 2006 and 2007. The consequence is that the percentage of home owners with mortgages has been roughly stable, and is assumed to be 55%. This indicates that there are about 4.8 million home owners with mortgages at present.• 17% of home owners with mortgages have taken out equity during the past year.• The average amount taken out was about $35,400.

Combining these factors, the total amount of equity take-out is calculated as $29 billion. To put this into perspective, personal disposable income of Canadians is about $900 billion per year. Equity take-out is equivalent to about 3% of disposable income.

This estimate of $29 billion is considerably larger than was estimated in the 2006 survey – the figure of $10.1 billion estimated in 2006 was for only equity taken out at the time of renewal. The much larger figure for 2007 includes equity taken out by people who took on new mortgages, as well as equity that was taken out at times other than the renewal dates (this can include drawing on secured lines of credit).

Out of the $29 billion in equity take-out, about 40% was taken by those who took out new mortgages, 30% was taken by those renewing mortgages, and 30% was by people who took equity through their existing mortgages or secured lines of credit. The survey data enables us to draw some conclusions about the characteristics of people who have taken out equity:• Across the age groups, there are no significant differences in the percentages of home owners that take out equity (except that there was negligible take-out by people aged less than 25).• The amounts taken out are highest for owners in their “middle working ages” of 35 to 54 (an average of about $38,000).• Across the country, there are small variations in the percentage of home owners that have taken out equity. In Atlantic Canada and central Canada (including Quebec, Ontario, and Manitoba) the shares are slightly below the national average of 17%; in the west (Saskatchewan, Alberta, and British Columbia) the share is about 20%.• Average amounts taken-out vary across the country, from $24,000 in Atlantic Canada, to $32,000 in central Canada, and $45,000 in the west.• It might be expected that people who expect house prices to increase rapidly would be more likely to take equity from their homes, and might take out larger amounts, but the data finds only a weak relationship.

An earlier section reviewed expectations of Canadians concerning the future of house prices in their communities. Among those expecting increases (about 39% of Canadians), 19% have taken out equity in the past year, slightly above the average rate of 17%, and the average amount taken out $37,000 was slightly above the average of $35,400. Those with neutral expectations about house prices (about 49% of Canadians) took out equity at the average rate, and took out the average amount. Among those with the lowest expectations about house prices (13% of Canadians), just 12% took out equity and the average amount taken out ($28,000) was 20% below average.

Those who took out equity were asked what they used the money for. Some people gave more than one purpose. Therefore, the following responses add to more than 100%. On average, 1.2 purposes were given:• 47% indicated that the money would be used for debt consolidation or repayment.• 43% gave renovation or home repair as the purpose. This category was mentioned much more often by older adults (55 and over, at 53%), than by those in the middle (35 to 54, at 44%), and those under 35 (30%).• Other responses included “other” (11%, usually to fund family expenses), to invest (6%), car purchase or repair (5%), to start up or invest in a business (5%) to purchase another property (4%), and to add a garage or granny suite (1)%.

"Dread of disaster makes everybody act in the very way that increases the disaster. Psychologically the situation is analogous to that of people trampled to death when there is a panic in a theatre caused by a cry of 'Fire!'" -- Bertrand Russell One the greatest assets I have acquired during my years on Wall Street is perspective. We all say that we understand the concept of risk; that equities provide better returns than other assets on average, over time precisely because they contain higher risk, and yet on days like today, we tend to wring our hands and wonder what in the world is wrong with the world. Welcome to Riskville, baby. I have worked hard nearly every day this year searching for those good companies trading at what I thought were attractive valuations. As of today, my fund is roughly flat for the year. In other words, I have made no money for myself despite nearly 7 months of work. So how do I feel about this? Well, I must admit that I dislike losing money about as much as anyone I know. And yet, I think I can put today's trading action in perspective. During my career I have seen many crashes, breaks and panics. In every single case, the market eventually recovered and went on to new highs. I suspect that this will happen again. The talking heads will be debating for days the implications of today's market development. They will talk (in breathless tones, no doubt) about the causes and reasons for the big move down and will roll out the "experts" who, by the way, were telling us to be cautious about the markets. You don't remember those guys? Funny thing, eh? What am I going to do? Some of the stocks that I liked but felt were a bit expensive look a lot more attractive to me today. I will likely shift some of my funds into some of these names. I am unlikely to make any actions that would be considered reactive to today's movements. I do not feel compelled to make my portofolio more or less defensive. I do not think that the fundamentals for companies like Kraft or Amgen have measurably changed in the last 24 hours. So, my bottom line for today remains the same as nearly everyday --find good stocks trading below fair value, buy them and sell them when they become more fully valued. Boring I know, but that's how I roll...

Tuesday, November 13, 2007

Tip of the hat to reader '/dev/null' for forwarding this news story. Credit card debt is obviously a major problem for many Canadians. It is hard for me to comprehend how much revolving debt many people have and they don't even realize that they are enslaving themselves to the cheap crap they bought on the card.

A new study of Canadians' credit debt finds that a whopping 25 per cent owe between $10,000 and $40,000, and 28 per cent don't even know the interest rate they pay on their main credit card.

The report by Credit Canada and Capitol One was timed for release during their Credit Education Week, and is designed to raise awareness of good financial management.

Laurie Campbell, of Credit Canada, said the numbers -- which don't factor in mortgage debt -- were surprisingly high.

"The numbers are quite startling, even I was quite surprised, but nevertheless, this is truly what we're seeing," Campbell told CTV's Canada AM.

"Savings rates at an all-time low and debt rates at an all-time high so this financial literacy week in my opinion is long overdue."

The study, which questioned 4,000 respondents about their personal credit debt practices, found a disconnect between Canadians' debt levels and retirement plans.

When asked about their total outstanding debt from credit sources and loans, respondents said the following (figures don't include mortgage debt):

$0 -- 16 per cent$10,001 to $20,000 -- 13 per cent$20,001 to $40,000 -- 12 per cent$100,001 to $200,000 -- 9 per cent$300,001 to $500,000 -- 1 per cent

Two per cent of Canadians said they had six credit cards; while six per cent had five credit cards; 12 per cent had four cards; while the majority, 25 per cent, had two credit cards.

Twenty-two per cent of Canadians said they had only one credit card.

When it came to the average balances people said they carried on their credit cards, 36 per cent said their monthly balance was $0 because they paid off their credit card each month.

Eleven per cent said their monthly balance was between $1,001 and $2,500, 9 per cent had a balance of between $2,501 and $5,000 while 1 per cent had the highest monthly balance of between $20,001 and $30,000.

When asked how their credit card habits could be best described:

50 per cent said they pay their credit card off in full every month.37 per cent said they pay the minimum requirement each month10 per cent said they do not have a credit card.3 per cent said they sometimes/often miss the minimum required payment.

"Certainly what happens with a lot of people is they look at their statement, they see a minimum payment, and say that's what I have to pay and unfortunately they don't look further to find out what the implications of only paying the minimum payment are," Campbell said.

When it came to budgeting, 53 per cent said they have no budget. Another 31 per cent said they have a budget and stick to it, and 16 per cent said they have a budget but rarely stick to it.

When asked when they thought they would be able to retire, respondents said the following:

13 per cent -- never3 per cent -- between 71 and 7624 per cent -- between 56 and 6029 per cent -- between 61 and 6514 per cent -- between 66 and 70

"The majority of people expect to be able to retire at 60 or 65," Campbell said.

"I don't know how they expect to retire if they're not saving, so there's a real dichotomy between the way people see their future and the way they're handling their money."

When asked what their top concern was regarding credit and debt management, 26 per cent said they worried about not being able to deal with unexpected emergencies.

Campbell said the goal of Credit Education Week is to raise awareness among Canadians about credit debt and how to deal with it, through providing free advice and online resources.

While a strong Canadian dollar has lulled many Canadians into a sense of financial security, people must be cautious, she said.

"People are very optimistic which is a very wonderful thing but you also have to plan for your future and think about where you're spending your money and put your goals in place, that's the most important thing."

Friday, November 09, 2007

With the rapid rise in the Canadian dollar I was curious to see how it has affected US demoninated investments.

First up is the Streetracks Gold ETF which is the equivalent to 1/10th an ounce of gold. Gold is quoted in US dollars so it can be difficult for us Canadians to grasp how that affects us when our currency is so volatile against the US dollar. Gold was $443 US in late 2004 and $535 CDN. At the beginning of 2007, gold was $622 US and $725 CDN. Now gold is at $822 US and $754 CDN. Dramatic appreciation in US dollars and very modest appreciation in Canadian dollars.

The Dow Jones Industrial Average (DJIA) was 10572 US in late 2004 and 12765 CDN. It was 12474 US at the beginning of 2007 and 14531 Canadian. Now the DJIA is at 13266 US and 12165 Canadian. Over the 3 year period the DJIA appreciated over 25% in US dollars but is down nearly 5% in Canadian dollar terms since 2004. Since the beginning of 2007 the Dow Jones has gone down nearly 20% in Canadian dollar terms while rising over 6% in US dollar terms. Wildly different results depending on the currency you are measuring in.

Thursday, November 08, 2007

Note: I apologize for yesterday's post. It was rife with errors and incorrect analysis. I need some uninterupted sleep real bad as my six month old boy is keeping my wife and I up at night a bit and I am certain my lack of sleep is contributing to some dumb-dumb mistakes. I also think my personal frustrations about living in the Vancouver area and the markets in general are getting the better of me right now.

Moving on - Anonyposter has returned with scraped data in hand. Mohican has made a chart and both are here for your viewing pleasure. Our Anonyposter has scraped listing and price data for the entire City of Vancouver on October 2 and November 5 and now we can compare and use that data to our hearts content.

Now that is a bad investment. Note: Investments that lose money and have no prospect of making money are “bad investments.”

An alternative scenario: Let’s assume for a moment that our prodigious landlord had a 20% down-payment and did not factor in opportunity cost of his capital (this seems like a brain-dead idea but let’s roll with it). Interest charges now equal $15,120.

Net Earnings = 19,200 – (15,120 + 2,000 + 1,440) = $640

Our example’s Price to Earnings ratio = $320,000 / $640 = 500 (A P/E of 500 would typically be reserved for a company whose growth rate exceeds 100% per year - this is definitely not the case in our example)

$640 of profit on a down-payment of $64,000 is a ridiculously low return on investment (0.1%) and I don’t know why anyone would want to be a landlord at these rates when you can just buy a GIC which pays 4.5% very easily with no risk.

In the stock market a Price to Earning ratio in excess of 15 is considered a highly valued company. Typically companies which trade a high P/E ratio are growing quickly and earnings are expected to grow thus making the future P/E ratio smaller. This is the markets way of paying for earnings growth. Companies reduce costs and increase revenues to improve their earnings and this is why being a stock-holder can be very beneficial.

In our example of the Cloverdale townhouse, where is the earnings growth going to come from?

Tuesday, November 06, 2007

A slower morning has given me the chance to go through the October statistics package from the Fraser Valley Real Estate Board. Here are my comments and some new charts:

Listings rose during October and so did sales. Months of inventory declined slightly from 6.3 to 6.0 from September to October. I don't know where people get the money to buy homes at these prices but they do. Insanity.

Median prices were flat to negative during October with the average and median detached home prices showing declines. Average apartment prices and the house price index for apartments were also down month over month. All other price changes were flat or small increases. Many areas of the Fraser Valley are experiencing sizeable declines in prices.

The year over year price changes are declining in the Fraser Valley with the current annual appreciation for all housing types as measured by the HPI / House Price Index at 8%. This is continuing the downward slide in appreciation from the heady days of 2006 at 24% annual appreciation. If we are to learn lessons from other housing markets we would expect the annual appreciation to continue to slide into negative territory in the next 6 months. The average time from peak YOY% appreciation to 0% is approximately 18 to 24 months - that is in the next couple of months.

The continued highly negative correlation between months of inventory and quarterly price changes is witnessed here. As we maintain inventory levels above 6 months, we should expect falling prices as the market moves into buyers territory.

For interest sake I wanted to see if there was any evidence of housing type price compression in the Fraser Valley and it appears to be a mild phenomena as witnessed by the small changes in the number of median apartments it takes to buy the median detached house. The ratio has been falling as we would expect in a compressing market. This is typical in bubble markets when buyers move down the property ladder as more expensive housing types become unaffordable.

Monday, November 05, 2007

(Surrey, BC) – Fraser Valley’s real estate market remained balanced in October, showing increases on the Multiple Listing Service® (MLS®) in listings, sales and average home prices. The total number of sales processed through the MLS® in October was 1,464, an increase of 14 per cent compared to the same month last year when 1,287 sales were processed.

New listings increased by 12 per cent compared to the same month last year with 3,124 new listings in October taking the number of active listings to 8,712, an increase of 17 per cent compared to the 7,438 active listings in October of 2006.

“It’s been seven years since Fraser Valley buyers had this much inventory to choose from,” says Jim McCaughan, president of the Fraser Valley Real Estate Board. “REALTORS® are able to show their clients more properties and as a result, we’re noticing a gradual increase in the length of time homes are on the market.”

In October, the average number of days to sell a detached home in the Fraser Valley was 52 days, an increase of 10 days compared to the same month last year. It took an average 8 days longer to sell an apartment last month, 47.4 days compared to 38.7 days in October 2006. Townhouses on the other hand took less time to sell in October with the average days to sell at 33 compared to 35 in October 2006. Jim McCaughan explains, “Townhouses are becoming more popular on both ends of the buying spectrum. They’re more affordable for families getting into the market and empty-nesters are opting to downsize to an attached home as a lifestyle choice.”The price of a single-family detached home in October averaged $517,087, a 6.1 per cent increase in one year. The average price in October 2006 was $487,238. The average price of a Fraser Valley townhouse in October was $329,991, an increase of 9.5 per cent compared to last year’s average price of $301,496. Average apartment prices in the Fraser Valley increased by 17.5 per cent compared to last year. In October 2006, they averaged $193,466 compared to $227,358 last month.

Friday, November 02, 2007

I am so busy right now its difficult to post regularly but here is what I've been thinking this week.

1) Mohican gives the fall mini-budget a B+ mark for a balanced approach to lowering taxes for individuals, consumers, and corporations. It makes Canada more competitive in an investment sense and helps us all keep more dollars in our pockets. I am a big fan of consumption taxes rather than income taxes so the mini-budget loses marks for the further cut to the GST. I would rather see that money spent on a broader income tax cut. That said, lower taxes are good for everyone.

2) The US Federal Reserve cut rates this week, prompting a broad selloff in the US dollar and a substantial rise in Gold and Oil. I don't see how the US economy is going to avoid a recession given the inflation outlook in the country to the south. Fuel prices alone could be enough to slow the economy into recession given the weak housing market already in place.

3) The Stingy Investor has some great research on various investment techniques and stock picking strategies. I highly recommend reading about them if you are into that sort of thing.

4) The REBGV and FVREB will release statistics on real estate sales, inventory, and prices for October early next week. I'm curious what sort of price action we will see. Clearly the FVREB is leading the march toward a declining market before the REBGV tips. Time will tell.

Renting Resources

"About the time everybody's walking around complacently, congratulating each other—"We've sure got it made! Now we can take it easy!"—suddenly everything will fall apart. It's going to come as suddenly and inescapably as birth pangs to a pregnant woman."